How the Best Managers Respond to Employees Who Ask for a Raise

Progress reports and review sessions are tricky.

Review season can be stressful no matter what side of the table you're sitting on.

If you're a manager, you've got a lot of work to do preparing performance feedback on top of your regular workload. And you probably have to deliver that feedback face-to-face. Sure, it's not easy hearing constructive criticism, but delivering it isn't something people look forward to either.

And one of the trickiest situations to navigate is a request for a raise or promotion. Especially if you weren't expecting it. But take a deep breath and remember that this is an opportunity to either show your employees how much you value them or help them grow into someone who's deserving of what they want.

Ahead of Time

Quick note: In an ideal world, you're reading this article several weeks before the formal process begins (and budgets are finalized). But we don't live in an ideal world and if that's the case, you can skip down to "in the moment."

Review Company Policies and Procedures

Before you do anything else, make sure you familiarize yourself with any company policies and procedures around reviews, compensation, and promotion. Knowing the basics will not only ensure you're giving your employees a productive review, but it'll also make it easier to handle any requests that do come up. If you're not sure if this information exists or where it lives, reach out and ask.

Evaluate Your Employees and Team

On the compensation side, take a look at any internal data you have on pay bands and see where your direct reports fall. Are there any outliers? Have any new additions to the team skewed the distribution? All things considered, is this a fair place for this employee to be?

On the promotion side, think about how your employee is doing in every area of responsibility for their own role and whether their performance goes so far beyond that scope that they'd meet the requirements for a more senior role, if there's one available. Make your initial recommendations based on this analysis.

The hope is that you'll have already secured raises and promotions for those who are eligible and deserving by the time you walk into the room for your meetings. You can help preempt problems by doing this work thoroughly and thoughtfully ahead of time. But be aware that no matter how well you prepare, it's impossible to avoid any surprises.

Set Expectations

Is there no budget? Is someone on your team underperforming? Do you know someone's counting on a raise or promotion that simply isn't happening. You can avoid a lot of drama and tension by having this hard conversation before the formal review.

I'll put an emphasis on "hard" because telling someone they're going to have to wait for what they want will never be fun to discuss.

You can start by saying something along these lines: "I know we're meeting next Wednesday to discuss your performance over the past year. I also know you might be anticipating a raise. Because I want this to be a productive conversation, I wanted to let you know that you're not eligible right now because [you're not hitting your goals/our team is on a tight budget/our research shows you're being compensating well for your role]. I know this is hard to hear. But I'm on your side and I'm your advocate here, so let's use our time next week to discuss how we can ensure you are eligible [next year/in X months] and all the other ways you can grow in the meantime."

Spoiler: The person will not be pleased to hear this. That's OK. The key right now is to acknowledge that they're disappointed and wait until your formal conversation to delve into feedback.

In the Moment

Acknowledge the Request

Fact: Asking for a raise or a promotion is stressful and emotional. If you've ever done this (and I hope you have!), you know this. So step one is making sure your direct report knows you've heard them by acknowledging the request.

Try:

"Thank you for bringing that to my attention."

"I heard you, and..."

Ask for More Information

"Your job as a manager is not to have an answer right then," Fitzgerald says. "It's to listen and gather information," she adds. It's "asking why they feel that way and digging in before responding."

You'll not only need to understand your employee's reasoning in order to make an informed decision and perhaps make a case to HR and your higher ups, but you'll also be able to figure out whether there are other issues you need to address--such as mismatched expectations about the role.

Try:

"Did you have something in mind?"

"Tell me why you feel that way."

"What do you feel is an appropriate range?"

Set a Plan and Realistic Time Frame for a Response

So you've made sure your employee feels their request has been heard and collected information about what they want and why they think it's appropriate.

Now, "a key point is never make a decision at the time a raise request is made," says Dick Grote, founder and president of Grote Consulting, where he specializes in performance management. Any yes or no answer given within minutes "comes off as flippant," he adds, and sets a bad precedent. Instead, let your employee know that when they should expect to hear from you about this. And be realistic.

Try:

"I will think about this and we'll talk again in [a few days or few weeks]."

"Let me look into this and get back to you in [whatever time is possible]."

"I wish I could get back to you sooner but it might take three weeks."

Keep Your Word

"Whatever you tell the employee, you have to keep your word," Dillon says. It can be tempting to be optimistic here, but consider the steps you'll need to take and be honest about how long it'll take before you can follow up. That goes a lot further than false hope.

So, if you tell your direct report you'll get back to them in two weeks, make sure you do that. Don't let whatever marker you set go by without discussing it.

And "certainly don't wait until the person brings it up again," says Grote.

After the Request

Do Your Homework

Now it's time to actually dig in. Double check your original evaluation, verify the points your employee brought up, assess any facts or accomplishments they shared that you might not have considered, take another look at their performance with fresh eyes, and think about the consequences of this decision when it comes to the rest of your team.

If you manage several people, you might want to wait until you've finished all of your reviews to tackle this. That way, you can evaluate all the requests (if you get more than one), seek guidance from your own boss on all of them at once, come to consistent decisions that make sense in context, and prepare the best strategy to make the case for one or more of your reports.

Make the Case (if It's Warranted)

If you've come to the conclusion that your employee's right, it's time to go to bat. Since it's unlikely you can make the call yourself, you need to figure out who you most need to convince in order to make this happen. And then try to be as persuasive as possible.

"That manager should have really good justification, citing quantifiable results and impact on the organization," says Regina Moravek, a contributor to The Muse who spent 15 years working in HR. So bring the numbers, but don't forget the qualitative information too. For example, highlight certain skills that are invaluable or bust out some quotes from customers or clients or whoever's relevant to demonstrate what this person means to the company.

Try:

"We're not sending the message we want to send with x% raise this year."

"I really feel [person] was such a star. We don't want to risk losing him."

"If [person] leaves, we're not going to be able to replace them for anywhere near their current salary or skill level."

"[Person] has certain skills, educational level that are important to our business."

"If [person] leaves and the job is vacant, it'll cost the company this much."

When You Come Back to the Employee

Deliver Good News

The best outcome, obviously, is getting and having the chance to deliver good news.

Don't forget that this is "also a really important time to convey to the employee how valued they are," Moravek says. The meeting is as much about "making the employee feel that they're an important part of the operation" as it is about the dollar amount or the new title, which she says alone can feel hollow. But if you add "we value you, you've had a huge impact on the organization," she says, the employee is more likely to be "motivated to continue to do great work."

And if you're delivering promotion news, "I always like to tell people that now the baseline goes way up," Dillon says. "You got it and I'm thrilled for you. But now you're starting at this level. This isn't a reward to sit back on."

Try:

"I've got some good news for you. I've looked over your request for a raise, given it some thought, done some research, and it seems to me that an increase in salary is appropriate."

"I thought about the request you made to reconsider compensation. After doing my research, I've decided that a compensation change is in order."

Deliver Bad News to a Strong Performer

Sometimes, no matter how well deserved you believe a raise or promotion is, you won't be able to get it approved.

Remember though that "growth can mean a lot of different things, not just money," Fitzgerald says. And see what else you can offer. It might be a spot bonus, the lead on a new project, the chance to develop skills or gain experience in an area of interest, extra vacation time, or another creative solution. The best option will be tailored to the individual.

"As a manager it's important to recognize the arsenal of tools for keeping employees happy. A lot of things are in your control," she adds, including creating a positive environment and giving people chances to grow. "A raise is one very important symbol," but it's also important to tell employees you value them and demonstrate as much in ways that go beyond money and titles.

And make sure it's clear that just because the answer is no at that moment doesn't mean it will always be no. You can commit to revisiting the topic again in three or six months.

If you believe in this employee's potential at the company, share that. "The conditions of the company/industry/competition right now are such that we're not in a position to do that," Grote suggests saying. Acknowledge that it's not what they wanted to hear: "I know you're certainly disappointed. I would be." But then add: "But I want to tell you something. I think you have a very bright future here."

Try:

"Unfortunately the company isn't in a position to give increases, but I would love to give you these other opportunities."

"I know you're interested in doing this kind of work as well, so let's change your job a bit."

"You and I are going to work together this year to make sure your profile is raised."

"I'm committed to giving you opportunities to shine."

"I appreciate you bringing this to my attention. I'm going to be more aware when promotion opportunities arise that you're going to be considered as a candidate."

Deliver Bad News to a Weak Performer

If your direct report "has no idea that they're not a star employee," Dillon says, that should be a "clue that you're not communicating effectively with the person."

"This is your opportunity to be fair to them," she adds. More than that, it's your responsibility as a manager to initiate a conversation to try to close the gap. Share what areas they're weak in or what you're disappointed about and tell them what you'd expect and like to see in order to have a different conversation the next time around.

Give concrete examples to ensure the employee understands the issues and has a firm grasp on how to improve. And plan your points in advance, because it isn't easy to give someone feedback that might be painful to hear, but you won't be doing them any favors if you waffle and fail to convey how they can fix it.

Try:

"These are areas you need to work on."

"Here are the goals I want you to work toward in the next six months."

"In your position, I expect..."

As a manager, you may not look forward to review season as the highlight of your year, but remember that it can set your team on the right track. And getting people on the right track means you're far more likely to hit your goals and succeed in your own role.